United Airlines Plans to Lay Off 2,800, Cut Salaries, Seek Concessions

United Airlines said Wednesday that it will lay off 2,800 employees, cut executive salaries by 5% and seek union concessions in the latest round of cutbacks in the money-losing airline industry.

United also announced a hiring freeze and said it will reduce its domestic schedule and cancel plans for some new international routes. The job cuts, to be implemented this month, amount to 3.3% of United’s 83,600 employees.

The company said the plan will reduce its expenses by $400 million.

United also said its parent, UAL Corp., expects to post a large loss for the fourth quarter of 1992. In the first three quarters of last year, UAL had a net loss of $165.9 million, it said in a statement.

United’s moves follow efforts throughout the airline industry to reduce costs after a year of rampant fare cutting and huge losses.

“Although our major competitors already have implemented substantial reductions in personnel, we have long hoped we could avoid such an eventuality,” said Stephen M. Wolf, United chairman and chief executive.

Wolf said United was forced to cut expenses to cut losses and ensure the company’s long-term viability.

United’s stock closed down $1.125 a share Wednesday at $123.875 at the end of after-hours trading on the New York Stock Exchange.

Analysts said investors may be worried about the size of the fourth-quarter loss, which is expected to accompany a huge write-off for the estimated cost of retirees’ health benefits.

United, the second-biggest U.S. carrier after American Airlines, had a 1991 net loss of $331.9 million.

The company did not identify the flights to be dropped from its schedule, but it said it will ground 40 of its older jets this year.

United said all company officers and “affected members of U.S. management” will take a 5% pay cut. Spokesman Joe Hopkins said he could not say how many management-level employees will be affected.

Other employees, most represented by unions, will be asked to make similar concessions, the airline said.

Plans to hire 1,900 people in 1993, including 250 flight attendant trainees, have been canceled.